Microsoft's Nook gamble

Microsoft is counting on friends to make it a hit later this year when it crashes a tablet-computer party at which Apple has been the star since the launch of the iPad.

The United States software colossus turned a draining patent lawsuit with Barnes & Noble into a mutually beneficial alliance that could make Nook digital books a cornerstone of a content "ecosystem" vital to selling Windows 8 tablets.

Microsoft said on Monday that it will make a US$300 million (S$371 million) investment in a new Barnes & Noble subsidiary focusing on the bookseller's digital reading capabilities, including its Nook tablet, and its college businesses.

"It is not a surprise they are making this kind of investment," said Gartner Research analyst Michael Gartenberg.

"Barnes & Noble is probably the best partner for them, and it ensures Windows has a book and magazine service as part of its overall ecosystem."

Tablets powered by Windows 8 software are expected by the end of this year.

Amazon.com Kindles - based on free Google-backed Android operating systems - and Apple iPads have proven that while buyers like slick hardware, they love devouring videos, music, applications, digital books and other "content".

"Sometimes we focus too much on the technology," said Mr Michael Ch erry, an analyst at Directions On Microsoft.

"The success of the tablet isn't going to be because it is running Windows, but because it has the apps people want and a price people want to pay for that kind of device," he continued.

Mr Cherry is certain Microsoft will enter into more alliances to cultivate a rich ecosystem for Windows tablets. Ironically, Microsoft launched tablet software a decade ago, only to see it fail because publishers and readers weren't ready for it, according to analysts.

"Sometimes Microsoft is too early to the party," Mr Cherry said. "Timing is everything."